Idorsia Ltd (VTX:IDIA) Analysts Are Reducing Their Forecasts For This Year

The latest analyst coverage could presage a bad day for Idorsia Ltd (VTX:IDIA), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.

Following the latest downgrade, the six analysts covering Idorsia provided consensus estimates of CHF135m revenue in 2024, which would reflect a perceptible 4.3% decline on its sales over the past 12 months. Per-share losses are expected to explode, reaching CHF1.49 per share. Yet prior to the latest estimates, the analysts had been forecasting revenues of CHF243m and losses of CHF1.24 per share in 2024. Ergo, there's been a clear change in sentiment, with the analysts administering a notable cut to this year's revenue estimates, while at the same time increasing their loss per share forecasts.

View our latest analysis for Idorsia

The consensus price target was broadly unchanged at CHF1.69, perhaps implicitly signalling that the weaker earnings outlook is not expected to have a long-term impact on the valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 5.7% by the end of 2024. This indicates a significant reduction from annual growth of 27% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 18% per year. It's pretty clear that Idorsia's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that analysts increased their loss per share estimates for this year. Unfortunately analysts also downgraded their revenue estimates, and industry data suggests that Idorsia's revenues are expected to grow slower than the wider market. The lack of change in the price target is puzzling in light of the downgrade but, with a serious decline expected this year, we wouldn't be surprised if investors were a bit wary of Idorsia.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Idorsia's financials, such as a short cash runway. Learn more, and discover the 1 other risk we've identified, for free on our platform here.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks with high insider ownership.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.